James Driscoll looks at the Housing Act 1988’s influence on a case of unlawful eviction of a social housing tenant
Key points
- The 1988 Act phased out the Rent Acts
- It allows a new civil damages claim for illegal eviction
- The 1988 Act applies to social as well as private landlords
- Damages must be assessed on the tenant’s occupation rights prior to the illegal eviction
The standout provisions of the Housing Act 1988 are those in Part I, which phased out tenancies protected by the Rent Act 1977 (with long-term security of tenure, fair rents and succession rights) with assured and assured shorthold tenancies where market rents are charged. After the simplification to using shorthold tenancies (by the Housing Act 1996) they have become the standard form of letting in the private rented sector.
Unlawful evictions
During the parliamentary debates on the 1988 Act, fears were expressed that unscrupulous private landlords would evict their tenants to make way for letting on a market rent where the new tenant would have limited or no security of tenure. In response, the 1988 Act allows for the award of damages for unlawful eviction based on the profit the landlord would make by unlawfully gaining vacant possession. The basis for this statutory award is section 27 and the measure of the damages is in section 28. Such awards may be in addition to other claims for the illegal eviction.
Although the focus was directed at private landlords, the drafting of the legislation is such that social landlords are also covered. It is therefore ironic that the Supreme Court has had to consider the scope of the damages awards under the 1988 Act in a case involving a social landlord: Loveridge v Lambeth London Borough Council [2014] UKSC 65; PLSCS 337.
Mr Loveridge had a secure tenancy (Housing Act 1985) in Lambeth of a ground-floor flat. During an extended foreign visit Lambeth assumed that he had died, even though the rent was paid. They peacefully recovered possession (without a court order), removed his belongings, left a notice to quit and relet the flat to another secure tenant.
Secure tenant evicted
The relet occurred just after Mr Loveridge had returned to the country so he was unable to prevent it from happening. He sued claiming damages including damages under sections 27 and 28 of the 1988 Act. In the county court he was awarded £9,000 (which the parties agreed) for the loss of his personal property and £90,000 under section 28 (on the basis of the court’s interpretation of that section). However, Lambeth succeeded in overturning that decision in the Court of Appeal. It adopted a different interpretation of section 28 and ruled that the award of damages under that section should be set aside in its entirety, but that the other damages award should be increased to £16,400. Since Mr Loveridge would become an assured tenant on the hypothetical sale, the valuation evidence showed that this would have no effect on value.
Appeal to the Supreme Court
Mr Loveridge appealed successfully to the Supreme Court, which unanimously allowed his appeal and restored the judgment of the county court.
In effect, section 28 states that a damages award should be based on the difference in value between the premises with and without the occupier. It also includes a number of statutory assumptions, including the assumption that the landlord is selling in the open market to a willing buyer. Where a private landlord unlawfully evicts a protected tenant the exercise should be straightforward as one values the premises subject to the tenancy against its value without the protected tenancy. The exercise, however, is more complicated and artificial where the landlord is a local authority as it cannot sell in the open market without government consent and before applying for such approval it must carry out a statutory consultation with the tenants who will be affected. An additional factor is that on such a sale the occupier’s statutory rights would change from being a secure to an assured tenant.
Applied to the circumstances of Loveridge, does one value on the basis that Mr Loveridge would have been a secure or an assured tenant at the time of the eviction? Unlike the county court, the Court of Appeal interpreted this as meaning that the valuation had to be made on the assumption that at the time of the eviction Mr Loveridge had ceased to be secure and had become an assured tenant. The Supreme Court supported the county court’s view: that Mr Loveridge’s right of occupation to occupy at the time of the eviction was as a secure tenant.
Adjustments should not be made for the changes to his position following the hypothetical sale. The Supreme Court referred to Wandsworth London Borough Council v Osei-Bonsu [1999] 1 EGLR 26, in which the Court of Appeal decided that the likely effects of a sale to a private landlord on the status of the occupier should not be brought into the valuation exercise.
Allowing the appeal, the Supreme Court restored the damages award under section 28 made by the county court. In a concluding comment, the court suggested that parliament might review the application of sections 27 and 28 to unlawful evictions by a local authority. After all, reasoned the Supreme Court, Lambeth did not realise, or intend to realise a capital gain by evicting Mr Loveridge; instead it intended to relet and did relet the flat. It seems wrong, reasoned the court, that by calculating damages by reference to a hypothetical gain, Lambeth will be required to pay Mr Loveridge “…out of public funds … an amount … 12 times greater than that of his loss” ([30]).
Professor James Driscoll is a writer and freelance lecturer
